Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for AprilJuly are: April May June July Sales: 45,000 $79,500 $58,500 $ 53,000 Cost of Goods Sold: 18,000 43,000 32,000 26,000 Gross Margin: 27,000 36,500 26,500 27,000 Selling and Administrative Expenses: Selling Expenses: 6,200 11,700 7,500 7,800 Administ. expense* 4,500 7,800 6,600 5,600 Total Sell/Admin exp. 10,700 19,500 14,100 13,400 Net Operating Income 16,300 17,000 12,400 13,600 *Includes $2,000 of depreciation each month. b. Sales are 30% for cash and 70% on account. c. Sales on account are collected over a three-month period with 10% collected in the month of sale; 60% collected in the first month following the month of sale; and the remaining 30% collected in the second month following the month of sale. February's sales totaled $24,500, and March's sales totaled $38,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $11,700. e. Each month's ending inventory must equal 70% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $12,600. f. Dividends of $1,000 will be declared and paid in April. g. Land costing $4,600 will be purchased for cash in May. h. The cash balance at March 31 is $8,000; the company must maintain a cash balance of at least $8,000 at the end of each month. i. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $40,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: (a) Compute the required inventory purchases for April, May, and June. (b) Compute the total cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.